The last day of an extended February and the latest EBC LTRO giveaway looming tonight led to a quiet, range-bound session for Asian markets, though risk was generally favoured in the first half of trading.
The major economic release of the day was Australia’s retail sales data for January, which came in bang in line with expectations at +0.3 percent m/m and posted a mild rebound from December’s dismal 0.1 percent decline. This was the first advance in 3 months. In other Australian data, private credit rose 0.2 percent from the previous month and was 3.5 percent higher than a year ago. Generally both sets of data were not viewed as spectacular but the AUD rode the wave of better risk appetite.
The first of the global PMI releases came from Japan today, with the Markit/JMMA manufacturing PMI easing off slightly to 50.5 in February from 50.7 in January, which saw the 3-month average rising to a 4-month high. A sluggish global economy and strong JPY are no doubt taking their toll. Drilling down into the numbers and we see the output component slipping to 51.3 from 51.4 while new export orders tumbled to 47.1 from 50.2, the lowest level since last November. Japanese industrial production continued to recover from a temporary slowdown due to the Thai floods, according to preliminary figures. Production was up 2.0 percent m/m, higher than the consensus 1.5 percent, with projections for February and March revised higher to 1.7 percent m/m.
Markets tended to trade in tight ranges overnight with subdued activity. News that the Irish PM will hold an EU fiscal compact referendum applied some pressure to the EUR in late trade but the single currency only just managed a touch below 1.34 versus the dollar. The CHF barely blinked to SNB’s Jordan’s comment that they would “defend with all determination” the EURCHF floor at 1.20. The pair held steady at 1.2050.
On the US front, durable goods orders were very soft in January, falling 4.0 percent m/m (the largest drop in 3 years) and well above the 1.0 percent median forecast. S&P/CaseShiller house prices also painted a gloomy picture with the 20-city index falling 0.5 percent m/m which, while posting a slower decline from the previous month, was below consensus forecasts. The bright note came from consumer confidence, which perked up to 70.8 from 61.5 and also strongly beat the 63.0 estimate. Wall St extended its recent rally into a fourth session with gains of 0.18 percent for the DJIA, 0.34 percent for the S&P and 0.69 percent for the Nasdaq.
Data Highlights
US Jan. Durable Goods Orders out at -4.0% m/m vs. -1.0% expected and revised +3.2% prior
US Dec. S&P/CaseShiller House Prices out at 3.99% y/y vs. -3.65% expected and revised -3.85% prior
US Feb. Consumer Confidence out at 70.8 vs. 63.0 expected and revised 61.5 prior
US Feb. Richmond Fed Manuf. Index out at 20 vs. 14 expected and 12 prior
NZ Jan. Building Permits out at +8.3% m/m vs. 3.4% expected and revised 2.6% prior
JP Feb. Markit/JMMA Manufacturing PMI out at 50.5 vs. 50.7 prior
JP Jan. Industrial Production out at +2.0% m/m, -1.2% y/y vs. 1.5%/-1.6% expected and 3.8%/-4.3% prior resp.
AU Jan. HIA New Home Sales out at -7.3% m/m vs. -4.9% prior
NZ Feb. NBNZ Activity Outlook out at 31.2 vs. 25.7 prior
NZ Feb. NBNZ Business Confidence out at 28.0 vs. 16.9 prior
UK Feb. GfK Consumer Confidence out at -29 vs. -27 expected and -29 prior
AU Jan. Retail Sales out at +0.3% m/m, as expected vs. -0.1% prior
AU Jan. Private Sector Credit out at +0.2% m/m, +3.5% y/y vs. 0.3%/3.6% expected and 0.3%/3.5% prior resp.
Upcoming Economic Calendar Highlights (All Times GMT)
JP Construction Orders (0500)
JP Housing Starts (0500)
GE Import Price Index (0700)
Swiss KOF Leading Indicator (0800)
Sweden Q4 GDP (0830)
GE Unemployment Rate (0855)
UK Net Consumer Credit (0930)
UK M4 Money Supply (0930)
UK BOE’s King, Tucker and Posen to testify (0945)
EU Euro-zone CPI (1000)
Swiss CPI (1000)
US Q4 GDP Revision (1330)
CA Teranet/National Bank House Prices (1400)
US Chicago PMI (1445)
US Fed’s Bernanke to testify (1500)
US NAPM – Milwaukee (1500)
US Fed’s Fisher to speak (1800)
UK BOE’s Weale to speak (1830)
US Fed Beige Book (1900)
Andrew Robinson,
SAXO BANK